CPPIB plans safer investing structure for hike in Canada Pension Plan contributions


The Canada Pension Plan Investment Board (CPPIB) has begun receiving additional contributions this week as part of a 2016 deal to enhance the plan. Contribution rates for both employees and employers will rise to 5.95 per cent by 2023 from 4.95 per cent in 2018. In a release on New Year’s Day, president and CEO Mark Machin said, “We will invest the additional stream of CPP with the same attention to appropriate growth, risk control and transparency that Canadians count on.” (Financial Post)

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Talking point: The CPPIB has established two investment pools to mitigate risk: A Supplementary Pool that will only have assets of the additional CPP account invested in it and will only be made up of fixed-income securities, and the already existing Core Pool. All of this is in an effort to get ahead of the looming demographic cliff which will result in fewer workers contributing and more retirees withdrawing from the fund. The fund’s two accounts are each expected to have assets of around $840 billion by 2055.